9.2 Corporate Insolvency Flashcards
Which is wider - associates under 435 IA or CP under 252 CA
435 IA
Who cannot bring claim for misfeasance against D
A
Where are ‘CPs’ defined for voidable transactions in IA
249
When do clawback and personal liability of Ds not apply
If only in receivership - must be L/A
What is the max time D can be disqualified under CDDA
15 years
WT under IA - where
214 + 246ZB
Who can bring a transaction defrauding creditor
Victim, e.g. creditor
Two other considerations if FT claim applies (for personal liability)
s.10 CDDA and it is a crime under 993 CA
When is the ‘onset of insolvency’
Issue of winding up petition
What test is used for ‘every step’ defence and knowledge under 214 WT
The higher of objective and subjective test
Four voidable transactions by company
Undervalue, preference, avoidance of certain floating charges and transactions defrauding creditors
Does the court consider the effect of ordering repayment under 239 preferences on beneficiary
No
How does the ‘relevant time’ for voidable transactions work
backwards from I onset
When will FT apply
If knew insolvency, but still incurred credit
Where are the clawback provisions in IA
238 - 241
What is the GF and reasonable grounds defence for 238 undervalue - what kind of test
Objective
What is a transaction at undervalue
Gift/significantly lower than MV
What is s.6 CDDA
Unfit
What about L’s expenses in clawback claim
Recovers even if loses claim
What single insolvency test is used for personal liability of Ds
BS
When will 423 always be considered
If 238 applies (undervalue)
Who alone can make D personally liable for misfeasance
Only L
What action for D’s personal liability requires actual dishonesty
FT
Three-stage test for preference by company
Given to C/S, in better position, and desire to prefer
What is s.4 CDDA
Fraud in winding up
What may D be liable for if clawback against other beneficiary
Misfeasance (212) and/or s.6 CDDA
Why is 423 harder than 238
Intent to prejudice required
Why is it easier to bring 423 claim successfully if short time since transaction
To prove ‘intent to prejudice’
What is s.10 CDDA
F/WT
What voidable transaction has a three-stage test
Preference
When will a floating charge voided under 245 stay valid
To extent any new money given in consideration
Can D avoid WT liability by resigning
Only if done everything they can to convince other Ds
What is not a ‘desire to prefer’ for 239
Commercial pressure
What do clawback provisions help to do
Restore funds that should have been available to creditors
When does the burden shift in 245 avoidance of certain floating charges
For ‘insolvency’ if to CP
How many potential claims personally against D
Four
FT under IA - where
213 + 246ZA
What may additionally happen if 245 applies (avoidance of certain floating charges)
Transaction may also be void under UV/preference
Who does FT claim apply against
Any person
When does the burden shift in transaction at undervalue
In ‘insolvency’ if CP
What will bank be concerned about when using representatives to guide company to avoid insolvency
That reps = shadow Ds, and thus liable
What case applies to 245 avoid floating charge
Clayton’s Case
How might charge avoided under 245 eventually cover all money
If some money given at beginning, and then pay back, and then draw down again
How many clawback provisions
4
When does the burden shift in 239 preference by company
Not for insolvency, but yes for ‘desire’ if to CP
Why is 423 perhaps more beneficial than 238
No relevant time
What are two of the four tests of insolvency
CF and BS
Where is misfeasance in IA
212
What two other considerations if WT claim applies (for personal liability)
S.6 and s.10 CDDA may apply
What personal liability of D is also a crime
FT under 993 CA
Where are four tests of ‘insolvency’
123 IA
Who can bring F/WT claim
L and A
What voidable transaction is automatic
Avoidance of floating charge under 245
What is it unclear about the application of 238 IA
If applies when granting security w/o consideration
Does avoidance of transactions unwind those transactions?
No
Why does 1157 not apply to let court give relief to D from BoD
Bc D has acted unreasonably
What should L/A check before avoiding floating charge
If properly registered under 859A - if not, 859H
What do you always mention when advising company on entering into transaction that may be avoided in insolvency
Although claim not made against the company but against third party, the Ds can be liable for misfeasance and/or disqualified as being unfit under s.6 CDDA
